Problem pick at Port Canaveral

April 4, 2010|By Beth Kassab, Business Columnist

Port Canaveral, a cruise-ship hub and site of the state's newest fuel-storage facility, is Central Florida's other East Coast economic engine.

As Kennedy Space Center struggles with the end of NASA's shuttle program and an uncertain future, more and more attention will be paid to the port and its potential for job growth and other development.

But recent events suggest the complex, a terminal for both passengers and industrial goods tucked between the Banana River and the Atlantic Ocean just south of the space center, is struggling with its own demons and with financial pressures brought on by the recession.

The Canaveral Port Authority, the special governing district designated by the state Legislature, is not yet ready to solo in the Brevard County spotlight once the space center scales back much of its operations.

Chief among the reasons: an internal debate over how the port should be managed and whether the system of electing five commissioners without term limits is still getting the job done nearly six decades after the district's creation. The Florida Department of Law Enforcement is investigating the port, potentially examining allegations of corruption as well as commissioners' relationships with port tenants, some of whom are among the commissioners' biggest campaign contributors.

In a strikingly blunt "State of the Port" speech last week, the authority's chief executive officer, Stan Payne, referred to the issue as the "elephant in the room."

"How do you reconcile a politically elected board of commissioners for an organization that must function as a business not simply to prosper but to survive, on which tens of thousands of jobs depend?" he asked.

Commissioner Ralph Kennedy resigned in October after 19 years. FDLE spokesman Mike Morrison acknowledged the existence of a continuing investigation but would not talk about the allegations or whom they involve.

The investigation is not the only thing with which the port is grappling.

Cargo activity and revenue have fallen dramatically since the housing bubble popped. The port hasn't seen a cement ship in two years, and these days it's getting one-tenth the lumber it saw in 2006, when it handled 700,000 tons, Payne said.

Two gambling-ship companies that operated boats out of Canaveral both went bankrupt last year. And port officials are frustrated that they still don't have federal approval to widen the port's channel by 100 feet — work that's needed to remain competitive, they say, because of the larger and larger cruise ships and cargo vessels being built these days.

The cruise industry is the port's bread and butter, generating ever-increasing revenue. For example, Canaveral expects a record 102 port-of-call visits by cruise ships this year and 126 next year.

Federal economic-stimulus funds and grants have allowed the port to, among other things, start a police department that is supposed to realize annual savings of as much as $800,000. And the fuel-storage facility, scheduled to open officially later this month, represents a private investment of $120 million and will likely mean new revenue for the port of upwards of $5 million a year.

But such economic potential is overshadowed by the questions surrounding the port's governance structure.

Payne — who serves at the pleasure of the elected commissioners and has been criticized by at least one, Raymond Sharkey, for overstepping his authority — said he thought long and hard before taking such a sharp tone in his port speech. As many as four of the five commission seats could turn over in November's election.

"I thought about the consequences of being so open," Payne said. "If I don't do it when I have the opportunity and see this port step up and realize its potential to help this region, then woe be to me. Whether there will be professional consequences, I don't know."

Payne also serves on the board of another troubled organization, Florida's Blood Centers, and says he has been approached — though he won't say by whom — about considering the chief executive's job there, replacing Anne Chinoda, who resigned last month under mounting public pressure.

"I've kind of wondered in what ways I can help," he said of the blood bank's troubles. "I'm trying to figure out what my role would be, to be the most helpful at this time."

In the meantime, he has his work cut out for him at Port Canaveral, as more people look to it for economic thrust once the final shuttle blasts off from KSC.